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Chinese companies are buying wood en masse in our country. Local sawmills cannot compete with the high prices they pay. ‘We will run out of raw materials within two years.’
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‘The Chinese buy up all the timber here. If the Belgian authorities do not intervene quickly, we will be without raw materials within two years and we will be a pub without beer.’ Marc Peleman is in charge of the Peleman Wood Sawmill in Puurs, which was founded in 1848 by his great-great grandfather. The company specializes in selecting, buying, measuring, transporting and sawing oak for the Belgian furniture and parquet industry, among others. He just came from a public wood sale but didn’t buy anything. Too expensive. He says he has never experienced what is happening at the timber auctions now.
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‘Chinese companies have been buying wood in our country for several years, but now it is running out of steam. For oak they offer 40 to 50 percent more than the going price. Prices we cannot afford. They even buy up small oaks and don’t wait for the trees to mature, which takes several decades. The wood is then transported in China – sea transport is cheap in that direction. There it is processed at dirt-cheap wages – a worker receives 120 euros per month. In some cases, the wood comes back here as a finished product. We are treated like a developing country. Even in Africa it is no longer allowed to buy oak for export without local processing. Our country still has a dozen deciduous tree sawmills. If nothing happens, several threaten to capsize.’
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According to Peleman, urgent measures must be taken to counter the ‘Chinese resource robbery’, as he calls it. ‘When in France at one point a sawmill went bankrupt almost every day because Chinese companies were buying wood there en masse, the government introduced fixed supply contracts for the French sawmills. Germany took protective measures. China has banned oak felling. The Chinese timber traders are therefore obliged to supply themselves abroad.’
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At the public auction, the Chinese are bidding 40 to 50 percent more than the current price for oak.
Marc Peleman
Owner of Wood Sawmill Peleman
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According to Peleman, there is little enthusiasm for the problem in Belgium. ‘The fact that we have five governments doesn’t make it any easier. The problem is most acute in Wallonia, where most forests are located. Moreover, many Walloon municipalities are struggling with money shortages and are only too happy to sell trees at expensive Chinese prices. You don’t hear the private owners of forests complaining either. Fortunately I bought oak forests in Chimay 15 years ago and I have a buffer. But many sawmills don’t have that.’
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Traders
Trade to China takes place via Belgian traders. The two big ones are ITS Wood in Namur and Antwerp Manuchar. Manuchar is a global player in the trading and distribution of chemicals, but is also active in the international trade of steel, plastic, paper and wood. It sold 4.2 million tons of raw materials last year, generating a turnover of 1.5 billion dollars, and has 450,000 m2 of warehouses. It is owned by Ackermans & van Haaren, the Maas family and the management.
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The situation is also worrying Fedustria, the federation of the furniture and wood processing industry. Filip De Jaeger: ‘The Chinese buy such large quantities that hardly any wood is left for the Belgian timber merchants and sawmills. Initially, the Chinese mainly bought hardwood – oak, beech and poplar – recently they also bought spruce. Even spruce trees that are affected by the typesetter or bark beetle. That is for packaging wood.’
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François De Meersman, the general secretary of the Timber Confederation, which represents the sawmills and forest operators, estimates that 80 percent of all hardwood in our country has been sold this year to timber traders working on behalf of Chinese clients. ‘They sometimes buy 80 percent of what is offered at public auctions. This means that certain qualities of some trees – especially oak – are barely available on the local market.’
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De Meersman does not know where this increasing Chinese buying urge comes from. “It is said that the Chinese buyers are subsidized by the Chinese government to buy wood all over the world. But we have no proof.’ He estimates that 10 percent of the trees they buy here are returned to Europe as finished products, such as parquet and furniture. ‘There is a mechanism behind it’, agrees De Jaeger. “But nothing illegal is happening. The European market is free.’
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De Meersman expects the problem to become even more acute now that Russia has decided to restrict the export of coniferous wood from the country from 1 January. ‘China imports a lot of wood from Russia. If that goes away, it may import even more from Europe and Africa. If the problem is not resolved within six months, I fear that Belgian sawmills will go bankrupt. ‘
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According to a study by the Timber Confederation, the number of sawmills in our country has fallen from 313 to 95 in the past 30 years. Ten years ago they were still processing 3.7 million m3 of round wood – 3.3 million m3 of coniferous and 370.00 m3 of hardwood. Now 2.9 million m3 – 2.7 million coniferous and 217,000 deciduous wood. Two thirds of the hardwood is sawn in Flanders. 93 percent of the coniferous wood is processed in Wallonia.
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Europe
Fedustria and the Timber Confederation raised the ‘Chinese problem’ with the Belgian governments and Europe. De Jaeger: ‘Europe says it has no leverage. But here the Belgian industry is seriously disadvantaged. Rules could be introduced that oblige the first processing of round wood to take place first in Europe. One could control alleged government aid or impose export restrictions. France did that for oak.’
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Whether that has an impact on the wood price for the consumer? The sawmills and the processing industry – furniture manufacturers, parquet producers – are particularly affected, says De Jaeger. ‘The higher wood price – plus 20 to 30 percent, depending on the wood – has many causes: covid, a lack of products, renovation drive, high transport costs. It’s not just China. We see that the balance between the demand for and the supply of wood is recovering.’
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A study by the Bouwunie shows that almost all carpenters and interior builders struggle with delivery time problems and rising product prices. This mainly concerns construction wood, plate material, osb and mdf, planks and slats, furniture fittings, insulation, window profiles, but also silicone, adhesives and sanitary appliances. A fifth say they pass on the price increases to the customer. Eight in ten indicate that their projects are delayed by these problems, an average of six weeks. Almost everyone has plenty of work. Half are looking for additional workers.
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‘The Chinese are buying raw materials everywhere and are becoming supreme’, says Peleman. ‘That has a general impact. I wonder if people are aware of that. If we’re not careful, we’re heading for disaster.’
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